Kurt Hellström, chief executive of Ericsson, emphasised his commitment to the handset joint venture Sony Ericsson Mobile Communications, saying the Swedish company has no plans to pull out, despite market speculation.
He said both partners knew beforehand that the venture would rely mainly on existing products during its first year of operation and that its market share would grow only when new models were introduced in the second year.
Sony Ericsson Mobile Communications will shortly launch next-generation phones with MMS (Multimedia Messaging Service) capability, he said.
Last month Hellström was quoted in an interview with The Wall Street Journal saying Ericsson will not continue pumping money into the venture unless its products catch on quickly. An Ericsson spokeswoman said these remarks had been misinterpreted.
Hellström's statement about Ericsson's plans to outsource its IT operations to reduce operating costs was correctly reported in the WSJ story, the spokeswoman added.
In Shanghai, Hellström said he expects Ericsson to post a profit in 2003.
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Quarterly profit at Ericsson has slumped by 35% year-on-year as the vendor felt the impact of costs associated with 5,000 job cuts across the business.